The long-awaited launch of spot ether(ETH) ETFs in the U.S. is expected to propel the price of the world’s second-largest cryptocurrency to new highs above $5,000, according to a recent report by crypto asset manager Bitwise.
While Bitwise acknowledges the price increase might not be immediate due to initial outflows from the Grayscale Ethereum Trust (ETHE) transitioning to an ETF, their chief investment officer, Matt Hougan, remains confident. “By year-end, I’m confident the new highs will be in,” Hougan stated in the report, “and if flows are stronger than many market commentators expect, the price could be much higher still.”
This bullish prediction is fueled by several factors. Firstly, Bitwise highlights the significant difference in the impact compared to Bitcoin spot ETFs launched in January. They point to Ether’s current 0% short-term inflation rate, contrasting with Bitcoin’s 1.7% rate when its spot ETFs debuted. This creates a scenario of high demand meeting a limited supply, potentially driving the price up.
Secondly, unlike Bitcoin miners who may need to sell their holdings, Ether stakers have less incentive to do so. With 28% of ETH currently staked and effectively removed from circulation, the overall supply available for trading is further restricted.
Also Read: Ethereum ETF FOMO? ICO Whales Move $65 Million In ETH To Exchanges
The report by Bitwise also forecasts that Ether spot ETFs will attract a substantial $15 billion in net inflows within their first 18 months. This positive outlook is echoed by Steno Research, another crypto research firm, which predicted an Ether price of at least $6,500 by year-end due to ETF inflows and other favorable market conditions.
The upcoming launch of spot Ether ETFs has generated significant excitement within the cryptocurrency industry. With increased accessibility for investors and a potential decrease in circulating supply, Ether’s price appears poised for a significant climb in the coming months.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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